UK Regulator Fines Lindar Media Over Compliance Breaches

The UK Gambling Commission (GC) has recently reached a significant regulatory settlement with Lindar Media, the operator behind the popular online gaming platform MrQ. The settlement, amounting to £690,947 (approximately €798,643 or $853,793), stems from various breaches related to anti-money laundering (AML) and social responsibility obligations. This development underscores the stringent regulatory environment in the UK's gambling industry and the importance of operators adhering to compliance standards.

The regulatory scrutiny began when the GC initiated a comprehensive review of MrQ's operations following a compliance assessment conducted in September 2022. The review aimed to assess the operator's compliance with regulatory requirements and identify any potential shortcomings in its AML and social responsibility protocols.

The findings of the regulatory review uncovered a series of inadequacies in Lindar Media's processes. These shortcomings extended across several critical areas, including AML measures and safeguards to protect individuals from gambling-related harm. In essence, the GC discovered that Lindar Media had not adequately fulfilled its regulatory obligations, raising concerns about the operator's commitment to ensuring a safe and compliant gambling environment for its customers.

One of the key areas of concern identified in the review was the operator's approach to AML. The GC noted that Lindar Media exhibited weaknesses in implementing AML policies, procedures, and controls. Effective AML measures are crucial in preventing money laundering activities within the gambling sector, and any lapses in this regard can have severe consequences for both operators and the industry's overall integrity.

Moreover, the review also highlighted deficiencies in the operator's responsible gambling policies, procedures, controls, and practices. This includes failures in identifying and addressing potential gambling-related harm among its customers. Responsible gambling measures are designed to protect individuals from the negative impacts of excessive gambling and addiction, and operators are required to have robust systems in place to detect and assist those at risk.

Additionally, Lindar Media was found to have breached several of its Licence Conditions and Codes of Practice (LCCP), which are essential regulatory guidelines that gambling operators must adhere to. These breaches encompassed a range of issues, from AML to social responsibility failings, further highlighting the scope of the operator's regulatory non-compliance.

In response to the identified failures and considering the actions taken by Lindar Media since the assessment, the GC determined that a regulatory settlement was warranted. The agreed settlement of £690,947 will be directed toward initiatives that support social responsibility, underscoring the regulator's commitment to safeguarding vulnerable individuals and ensuring that gambling operators fulfill their regulatory obligations.

The Compliance Assessment Findings

The GC's compliance assessment of Lindar Media revealed specific areas where the operator had fallen short of regulatory expectations. These findings shed light on the nature and extent of the identified breaches:

1. AML Policies and Controls: Lindar Media exhibited weaknesses in its implementation of AML policies, procedures, and controls. Adequate AML measures are essential for detecting and preventing money laundering activities, and the operator's deficiencies in this area were a cause for concern.

2. Responsible Gambling Measures: The operator's responsible gambling policies, procedures, controls, and practices were also found to be lacking. This includes failures in identifying and assisting customers who may be at risk of experiencing gambling-related harm.

3. Reporting and Compliance: Lindar Media faced issues related to reporting key events promptly, as required by its licence conditions. This includes timely reporting of personnel changes, such as the departure of its head of regulatory compliance in June 2022.

4. Advertising Practices: The GC criticized Lindar Media for allowing its agents to use cartoon imagery in advertisements, which could potentially appeal to children. Although the operator took corrective action by removing these ads, the use of such imagery was deemed problematic.

5. Risk Assessments: Lindar Media's risk assessments for money laundering and terrorist financing (ML and TF) were inadequate. They did not sufficiently address risks related to customers, their means of payment, or emerging risk factors.

6. ML and TF Controls: The operator was found to have failed in implementing appropriate controls for ML and TF risks. This included automatically assigning a "low" level of ML risk to new customers without adequate assessment.

7. Financial Thresholds: The financial thresholds for ML risk were deemed excessively high, allowing customers to deposit and lose significant sums without adequate risk assessment. This approach was considered not sufficiently risk-based.

The Path Forward for Lindar Media

In response to the regulatory settlement, Lindar Media's Chief Executive, Savvas Fellas, acknowledged the breaches and highlighted the steps taken by the company to address the identified shortcomings. Fellas emphasized that the breaches occurred during a period of growth for the business and that significant improvements had been made in the realm of safer gambling policies and compliance measures.

Fellas stated, "My focus since 2022 has been centered around maturing the day-to-day operations through the development of the senior leadership team. We've implemented scalable processes that provide consistency as we grow and built technology-driven models that underpin compliance and safer gambling promises to our players; all of which are aligned with our mission of offering progressive, value entertainment – with delight and transparency."

The Future of Regulation and Compliance in the UK Gambling Industry

This regulatory settlement with Lindar Media is just one example of the UK Gambling Commission's commitment to maintaining a robust and accountable gambling industry. The regulator's vigilance in enforcing compliance standards ensures that operators are held accountable for adhering to AML and responsible gambling requirements.

In 2023, the UKGC has imposed several penalties on operators for various compliance failings, including AML and social responsibility shortcomings. These penalties serve as a clear message that regulatory breaches will not be tolerated, and operators must prioritize the safety and well-being of their customers.

In May, SkillOnNet faced a £305,150 penalty for AML and social responsibility breaches. Additionally, Unibet-operator Kindred paid £7.1 million in penalties in March, while William Hill incurred the largest regulatory action ever imposed by the Commission, resulting in a £19.2 million payment for a series of breaches during the same month.

The regulatory landscape in the UK gambling industry continues to evolve, with stricter compliance requirements and increased scrutiny. Operators must remain vigilant in ensuring that they meet their regulatory obligations to maintain a thriving and responsible gambling sector in the UK.

By fLEXI tEAM